Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) joined U.S. Senator Chris Coons (D-Del.) in introducing bipartisan, bicameral legislation to provide expanded tax support for American companies that invest in the research and development of new products and technologies.
“In the midst of the coronavirus pandemic, we need to harness our best ideas to develop vaccines, testing, treatments, and protection for frontline workers and vulnerable populations alike. Nevada has been a leader in innovation, but our startups and small technology firms can struggle to access the funds they need for research and development that will save lives and help our economies rebound. This bipartisan legislation will make it easier for cutting-edge solutions to become reality.”
The United States spends far less supporting R&D than international competitors do. This places American businesses at a disadvantage, undermining the U.S. economy and leaving the country ill-prepared for crises like COVID-19.
The Furthering Our Recovery With American Research and Development, or FORWARD, Act:
- Expands access to the research and development tax credit for new small- and medium-sized businesses. Firms with up to $20 million in gross receipts will be eligible to use the credit to reduce their payroll tax obligation during a span of 8 years—up from current thresholds of $5 million and 5 years. A new de minimis threshold delays the start of the 8-year window until gross receipts exceed $25,000.
- Strengthens the economy by incentivizing American manufacturing. The R&D credit is increased for companies that generate the majority of their gross receipts from manufacturing their products in the United States.
- Targets specific activities that enhance economic productivity by spreading knowledge and work opportunities to the U.S. workforce. The full R&D credit is expanded to cover R&D-related worker training costs. For R&D performed in collaboration with industry consortia, academic institutions, federal laboratories, and other entities, the credit rate is increased by one quarter (to 25% and 17.5% for the Regular Research and Alternative Simplified Credits, respectively).
- Activates the R&D credit by providing outreach, education, and training for businesses with limited accounting expertise, to be provided by the Small Business Administration and the Internal Revenue Service.
The FORWARD Act is supported by the American Small Manufacturers Coalition, the Information Technology and Innovation Foundation, the Center for American Entrepreneurship, Third Way, the American Society of Mechanical Engineers, Intelligent Manufacturing Systems International, the Delaware Small Business Development Center, the Association for Manufacturing Technology, the Manufacturing Alliance of Communities, Cover & Rossiter, the Delaware Prosperity Partnership, the National Center for Defense Manufacturing and Machining, the State Science and Technology Institute, the University City Science Center, AlliantGroup, and the Small Business Investor Alliance.
Senator Cortez Masto has been leading the way in developing and supporting legislation that promotes Nevada small business startups and has championed the need for the responsible incorporation of emerging technologies within her Innovation State Initiative. Whether it’s been development of more green energy, the incorporation of drone technology, or expanding smart communities, she has been working to improve Nevadans’ daily lives and expand job-creating technology sectors.